‘How we can ensure that caring is recognised as much as work’

Many people give up their careers or free time to “be there” for their family members. What’s unacceptable is that, until very recently, many carers were also sacrificing their future security in retirement.

The fact that more of us are living longer is having a two-fold impact on carers. On the one hand, an increasing number of sons and daughters are downshifting their jobs, or even leaving work altogether, to look after elderly parents. On the other, carers themselves are living much longer than before. So if there’s a shortfall in their pension provision, many carers could face a long, drawn-out financial struggle in retirement.

Traditionally, women have undertaken the lion’s share of caring for children, elderly or disabled relatives. That’s why only 35% of women reaching state pension age today are entitled to a full basic state pension, compared with 85% of men.

However, the Pensions Act 2007, which received Royal Assent in July, is about to start significantly changing things for the better. As well as reducing the number of years needed for a full basic state pension to 30 – down from 39 years for women, and 44 for men – we are also modernising the system, so that caring is properly recognised and rewarded.

Carer’s credit

When the carer’s credit is introduced in 2010, it will ensure that caring contributions are recognised in the same way as work. The new credit will be available for eligible people who are caring for children or severely disabled people for at least 20 hours a week.

Thanks to the introduction of this credit, from 2010 around 120,000 more people – including 85,000 women – will get a credit that counts towards their basic state pension, and around 180,000 more people caring for a disabled person – including 110,000 women – will be credited into state second pension.

In turn, by 2025, the proportion of women retiring with a full basic state pension will have risen to more than 90%. But improving their pension is only part of the work being undertaken by the government to ensure that the profound contribution made by carers is properly recognised, valued and rewarded.

Consultation

Earlier this year, Gordon Brown announced a review of the National Carers Strategy and launched a far-reaching consultation. DWP attended the launch at Downing Street and also organised a number of workshops, question and answer sessions and information stands about carer’s allowance around the country.

We’ve made a number of changes to help carers through the benefits system and we want to make sure that as many people as possible know about the help that is available to them.

Carers can also work part-time – earning up to £87 a week after tax – and receive carer’s allowance. And we’ve also got rid of the age limit, which used to prevent carers over the age of 65 from claiming this allowance. As a result, the number of claimants has now reached almost half a million.

It is part of our ongoing commitment to listen to carers’ concerns, respond to their needs and show them we also really care.

Mike O’Brien is minister for pensions reform at the Department for Work and Pensions

Visit www.directgov.gov.uk for more information for carers and www.dwp.gov.uk for details of pensions and benefits